DECISION AND ORDER

OF THE DEPARTMENT OF ENERGY

Application for Exception

Name of Petitioner: Middleton Oil Company, Inc.

Date of Filing: May 31, 1996

Case Number: VEE-0025

On May 31, 1996, Middleton Oil Company, Inc. (Middleton), located in Greenville, Alabama, filed an Application for Exception with the Office of Hearings and Appeals (OHA) of the Department of Energy. In its Application, Middleton requests that it be relieved of the requirement that it file the Energy Information Administration's (EIA) form entitled "Resellers'/Retailers' Monthly Petroleum Product Sales Report" (Form EIA-782B). As explained below, we have determined that the Application for Exception should be granted.

A. Background

The EIA-782B reporting requirement grew out of the shortages of crude oil and petroleum products during the 1970s. In 1979, Congress found that the lack of reliable information concerning the supply, demand, and prices of petroleum products impeded the nation's ability to respond to the oil crisis. It therefore authorized the DOE to collect data on the supply and prices of petroleum products. The current form collects information concerning the volume and price of various grades and types of motor gasoline, No. 2 distillates, propane, and residual fuel oil, broken down by customer type.

Information obtained from the survey is used to analyze trends within petroleum markets. Summaries of the information and the analyses are published by the EIA in publications such as "Petroleum Marketing Monthly." This data is used by Congress and by more than 35 state governments to project trends and to formulate state and national energy policies. In addition, firms in the petroleum industry frequently base business decisions on the data published by the EIA.

The DOE has attempted to ensure that this survey yields valuable information while minimizing the burden placed on the industry. Thus, in designing the form, the DOE consulted with potential survey respondents, various industry associations, users of the energy data, state governments, and other federal agencies. Moreover, to minimize the reporting burden, the EIA periodically selects a sample of companies to file the report.<1> In addition, to reduce the amount of time spent completing the forms, firms may rely upon reasonable estimates.<2>

B. Exceptions Criteria

Form EIA-782B is a mandatory report designed to collect monthly information on refined petroleum sales volumes and prices from a sample of resellers and retailers. 42 U.S.C. § 7135(b). This Office has authority to grant exception relief where the reporting requirement causes a "serious hardship, gross inequity or unfair distribution of burdens." 42 U.S.C. § 7194 (a); 10 C.F.R. §1003.25(b)(2). Exceptions are appropriate only in extreme cases. Because all reporting firms are burdened to some extent by reporting requirements, exception relief is appropriate only where a firm can demonstrate that it is adversely affected by the reporting requirement in a way that differs significantly from similar reporting firms. Thus, mere inconvenience does not constitute a sufficient hardship to warrant relief. Glenn W. Wagoner Oil Co., 16 DOE ¶ 81,024 (1987).

In considering a request for exception relief, we must weigh the firm's difficulty in complying with the reporting requirement against the nation's need for reliable energy data. See Champlain Oil Co., Inc., 14 DOE §81,022 (1986); Eastern Petroleum Corp., 14 DOE § 81,011 (1986). This entails balancing any burden the firm may encounter in meeting its reporting requirement against the public interest in collecting reliable information concerning energy markets upon which public decisions may be based. Neither the fact that a firm is relatively small, nor the fact that it has filed the report for a number of years alone constitute grounds for exception relief. If firms of all sizes, both large and small, are not included the estimates and projections generated by the EIA's statistical sample will be unreliable. Mulgrew Oil Co., 20 DOE ¶ 81,009 (1990).

The following examples illustrate the types of circumstances that may justify relief from the reporting requirement. Since each case is different, these examples are not intended to reflect all circumstances that justify exception relief:

· Financial difficulties underlie most approvals of exception relief. We have granted a number of exceptions where the applicant's financial condition is so precarious that the additional burden of meeting the DOE reporting requirements threatens its continued viability. Mico Oil Co., 23 DOE ¶ 81,015 (1994) (firm lost one million dollars over previous three years); Deaton Oil Co., 16 DOE ¶ 81,026 (1987) (firm in bankruptcy).

· Relief may be appropriate when the only person capable of preparing the report is ill and the firm cannot afford to hire outside help. S&S Oil & Propane Co., 21 DOE ¶ 81,006 (1991) (owner being treated for cancer); Midstream Fuel Serv., 24 DOE ¶ 81,023 (1994)(three month extension of time to file reports granted when two office employees simultaneously on maternity leave); Eastern Petroleum Corp., 14 DOE ¶ 81,011 (1986) (two months relief granted when computer operator broke wrist).

· A combination of factors may warrant exception relief. Exception relief for 10 months was granted where personnel shortages, financial difficulties, and administrative problems resulted from the long illness and death of a partner. Ward Oil Co., 24 DOE ¶ 81,002 (1994); see also Belcher Oil Co., 15 DOE ¶ 81,018 (1987) (extension of time granted where general manager abruptly left firm without notice).

· Extreme or unusual circumstances that disrupt a firm's activities may warrant relief. Little River Village Campground, Inc., 24 DOE ¶ 81,033 (1994) (five months relief because of flood); Utilities Bd. of Citronelle-Gas, 4 DOE ¶ 81,205 (1979) (hurricane); Meier Oil Serv., 14 DOE ¶ 81,004 (1986) (three months where disruptions caused by instillation of a new computer system left firm's records unaccessible).

C. Middleton's Exception Application

Middleton, located in Greenville, Alabama, sells #2 residential fuel oil, non-residential heating fuel oil, and wholesale and retail motor gasoline. Classified by the EIA as a "medium sized company," Middleton has filed Form EIA-782B throughout EIA Sample 11, which began in April 1994.<3>Because Middleton is not classified as a "certainty firm" by the EIA, it is possible, but not guaranteed, that the company will be rotated out of the reporting sample when EIA conducts the next random selection process for inclusion in EIA Sample 12.

In the Application for Exception, the bookkeeper for Middleton, Ms. Betty Hobbie, requests relief from the EIA reporting requirement because she believes the requirement is currently unduly burdensome to the company. Ms. Hobbie writes: "Mr. W.Z. Middleton (Owner) of Middleton Oil Co., Inc. passed away... May 20, 1996 and at this time I just about have more than I am able to take care of. He had been sick for several months and had heart surgery on May 15, 1996." In a telephone conversation on June 20, 1996, Ms. Hobbie stated that Mr. Middleton had been extremely ill since the beginning of 1996.<4> As a result, Ms. Hobbie helped complete some of the tasks for which he was responsible (e.g. monitoring accounts payable and receivable, issuing checks, etc.) for several months in addition to her regular duties as company bookkeeper. After his death on May 20, 1996, she became solely responsible for all of these tasks. The office staff consists of Ms. Hobbie, a receptionist and one other employee who performs basic office functions as the need arises. Ms. Hobbie states that neither of these employees could take over the responsibility of completing Form EIA-782B each month, and that the four hours it takes her to complete the form each month is excessively burdensome given the current office situation.

D. Analysis

Our review of the information presented in the Application for Exception submitted by Middleton leads us to conclude that there is considerable merit to Middleton's contention that it is currently significantly more burdened by the reporting requirement than similarly situated respondents. In the past, we have granted exception relief when a firm has demonstrated that the reporting requirement imposes an unusual burden on the firm or could seriously impede the firm's business operations. For example, in Lumberport-Shinnston Gas Co., 5 DOE § 81,328 (1980), we relieved the applicant of its reporting obligation because the firm lacked the personnel needed to complete the form and was unable to hire an outside consultant.

We believe such circumstances exist in the present case and that granting exception relief to Middleton is appropriate. In the Application, Ms. Hobbie states that, due to Mr. Middleton's long-term illness and death, she is now responsible for fulfilling all of his former tasks in addition to her own full-time responsibilities. She claims she is the only member of the office staff able to complete Form EIA-782B each month. And, even if Ms. Hobbie believed another employee could relieve her of this duty, it is highly unlikely that another employee could be easily trained to complete the form given the extremely small size of the staff.

We conclude that the burden placed upon Middleton at this time, due to the circumstances of Mr. Middleton's illness and recent death, coupled with the unavailability of personnel other than Ms. Hobbie to complete the form, is greater than that encountered by other firms required to complete Form EIA-782B. Accordingly, Middleton should be granted temporary relief from its obligation to file Form EIA-782B. We will therefore grant exception relief to Middleton for a one-year period, which should give the firm sufficient time to rectify its current employment difficulties.

It Is Therefore Ordered That:

(1) The Application for Exception filed by Middleton Oil Co., Inc., Case No. VEE-0025, is hereby granted to the extent set forth in paragraph (2) below.

(2) Notwithstanding the instructions to Form EIA-782B, Middleton Oil Co., Inc. shall not be required to file reports to the Energy Information Administration for a one-year period, beginning July 1, 1996 and extending to July 1, 1997.

(3) Administrative review of this Decision and Order may be sought by any person who is aggrieved or adversely affected by the denial of exception relief. Such review shall be commenced by the filing of a petition for review with the Federal Energy Regulatory Commission within 30 days of the date of this Decision and Order pursuant to 18 C.F.R. Part 385, Subpart J.

George B. Breznay

Director

Office of Hearings and Appeals

Date:

<1>Firms that do business in four or more states or which account for over five percent of the sales of any particular product in a state are always included in the sample of firms required to file the report. A random sample of other firms is also selected. This random sample changes approximately every 12 months, but a firm may be reselected for a subsequent sample. A firm that has been included in three consecutive random samples will generally not be included in a fourth consecutive sample, but may be included in a later sample.

<2>The firm must make a good faith effort to provide reasonably accurate information that is consistent with the accounting records maintained by the firm. The firm must also alert the EIA if the estimates are later found to be materially different from actual data.

<3>See Record of Telephone Conversation between Sherry Beri, EIA, and Darcy Goddard, OHA Staff Analyst (June 18, 1996).

<4>See Record of Telephone Conversation between Betty Hobbie, Middleton Oil Company, Inc., and Darcy Goddard, OHA Staff Analyst (June 20, 1996).